UPSC Economic Questions and Answers

UPSC Economic Questions and Answers

The civil services exam is one of the toughest examinations conducted in the country, and economy questions constitute a major of the two written phases of the examination. At BYJU’S we bring to you a compiled list of Economy questions along with answers that are suitable from the prelims and mains perspective.

These answers have been provided by UPSC experts for the candidate’s assistance, without any indirect or ambiguous information. Questions based on sustainable development, GDP, economic growth, taxation, etc. are included in the economy syllabus and the list of questions provided below will focus on the same.

The compiled list of questions given below comes with straightforward and crisp answers, with the IAS mains General Studies-III paper syllabus as the focal point. Aspirants can refer to these questions and answers and familiarize themselves with the depth of important economic topics as per the UPSC Syllabus.

When the rupee gets devalued, the import of goods becomes very expensive. Devaluation of the rupee can lead to inflation in the economy....
There are varied reasons behind depreciation of rupee, they are: inflation, balance of payments, current account deficit, currency wars, capital...
First devaluation of the Indian Rupee took place on 19th September, 1949. India devalued the rupee from ₹3.309 to a dollar to ₹4.762. Rupee...
Yes, the laffer curve was used to put forward the argument that incessant increase in tax rates is not productive. In the US, the Laffer curve...
The trade off in the Laffer Curve is between tax revenue and tax rates. The laffer curve is inverted U shape. The tax revenue keeps increasing as...
When a country is on the downward sloping side of the laffer curve, cutting tax rates will help in increasing the tax revenues. The tax revenues...
Administrative ease, simplicity, fairness, transparency, and adequacy are the conditions that must be fulfilled for creating a good tax...
In the 906 cases of tax evasion against exporters, between July 2017 to August 2020, the quantum of tax evasion was Rs 2,551.15 crore. India...
In India, tax evasion is always a criminal offence. In the Income-tax Act of 1961, under Chapter XXII, there are provisions for prosecution of...
There are many causes behind tax evasion. Some of the causes of tax evasion are the existence of tax havens, higher tax rates, lack of integrity...
7 years imprisonment is the longest tax evasion sentence. 3 months imprisonment is the minimum sentence for tax evasion. The sentence for tax...
Yes, tax evasion is a serious problem. In the Income-tax Act of 1961, under Chapter XXII, there are provisions for prosecution of people who...
Usually tax evasion or fraud investigation requires 1000 to 2000 staff hours. Such investigations usually take 1 year to 2 years. Moreover, it...
Legally reducing one's taxable income is known as tax avoidance. Hiding, concealing or manipulating the information about one's income with the...
The Government tax revenue will be maximum at optimal tax rate represented in the Laffer Curve. If the tax rate reaches 100%, then it will be...
Some of the criticisms of the Laffer curve are, it makes very simplistic assumptions, revenue may well be a multivalued function of tax rate...
The Laffer curve peaks when the tax rates are at around 65% as per a model predicted and presented in 1995 by the economist Paul Pecorino. You...
The Laffer curve is inverted U-shape. At the top of the laffer curve is the optimal tax rate for generating maximum revenue. When compared to...
The Conservatives in the USA had made use of the Laffer Curve to argue that tax revenues could be increased by reducing taxes. The tax cuts in...
There are many ways deployed by tax authorities to catch tax evasion offenders. The agencies look into social media footprints, take the help of...